London's Starling Bank is the UK's latest unicorn after becoming the 10th fintech firm in the country to surpass the $1 billion mark.
A fresh cash injection of £272 million from an investment round took Starling's valuation up to £1.1 billion ($1.5 billion) on Monday.
Starling's latest funding round was led by Fidelity Investments and included financial input from Qatar's sovereign wealth fund. According to business analytics firm CB Insights, the UK now has 10 fintech unicorns, including Monzo, Revolut, Wise (formally TransferWise) and local payment provider PPRO.
"Digital banking has reached a tipping point," Starling's CEO Anne Boden said in a statement. "Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services.
"Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence."
Starling has suggested that the new money will be used to expand into Europe and for some mergers and acquisitions. The milestone rounds off a very successful 12 months for the challenger bank, which has been boosted by rapid customer adoption and also government-backed loan schemes.
The London-based fintech startup saw an increase in lending activity in 2020 with £1 billion worth of loans on its balance sheet by the end of July, a figure that has now doubled to exceed £2 billion.
This was from the emergency loan scheme the UK's government had created in response to the first lockdown, which left many of the country's startups in financial trouble.
Additionally, the bank is one of the fastest-growing in the UK and has opened more than two million accounts since it started in 2017, with a new customer joining the bank every 39 seconds. This includes more than 300,000 small business accounts, the company said.
